Export Oriented Hydropower Projects in South Asiasaarcenergy.org/wp-content/uploads/2016/06/Study-Report2_Shyam.pdfExport Oriented Hydropower Projects in South Asia ... 235,110 3km

Export Oriented Hydropower Projects in South Asia

Development of a Potential Regional Hydropower Plant in South Asia:

Pre-feasibility Study

Water Resources in South Asia



Source: International Centre from Integrated Mountain Development (ICIMOD)

Large river systems in South Asia: Amu Darya, Indus, Ganges and Bramhaputra ;

Hindu Kush Himalaya Major Hydropower Resource in South Asia: Himalayas - 35,110 km2 snow and ice cover (containing 3,735 km3 of snow and ice);

Huge hydropower potential in Himalaya abut Afghanistan, Bhutan, India, Nepal and Pakistan;

3,500 km long Himalaya is the source of 10 large Asian river systems;

Hydrological Cycle “Himalayan Catchments”



http://sciencelearn.org.nz/var/sciencelearn/storage/images/contexts/h2o-on-the-go/sci-media/images/the-water-cycle/123045-8-eng-NZ/The-water-cycle.jpg

Hydrological Cycle “Himalayan Catchments”:

http://media.diercke.net/omeda/800/10913E_2_Indien_Monsune.jpg

http://www.the-cryosphere.net/4/115/2010/tc-4-115-2010.pdf

Summer Monsoon (Wet Monsoon) blowing from the South-West - Dominates the hydrology of “Himalayan catchments” (July to mid September );

Winter Monsoon (Dry Monsoon): blows from the northeast (October to April);

Hydropower Potential, Installed Capacity and Export Potential



84,400 MW

60,000 MW,

23,760 MW 775 MW,

18,400 MW, 2,423 MW,

42,130 MW

Total Potential 231,888 MW, Bhutan and Nepal - Huge hydropower potential in excess of their demand for electricity;

Export Potential:

Hydropower Potential and Capacity

S. No. Country Potential Economic Potential

Present Generation Percentage

1 Afghanistan 23,000 MW 18,400 MW 298 MW 1.62%

2 Bangladesh 1,897 MW 775 MW 220 MW 28.39%

3 Bhutan 30,000 MW 23,760 MW 1484 MW 6.25%

4 India 150,000 MW 84,400 MW 40,195 MW 47.62%

5 Nepal 83,000 MW 42,130 MW 743 MW 1.76%

6 Pakistan 100,000 MW 60,000 MW 6,928 MW 11.54%

7 Sri Lanka 4,000 MW 2,423 MW 1,628 MW 67.19%

Total 391,897 MW 231,888 MW 51,496 MW 22.21%

Bhutan - Only country in the region to export electricity.

Afghanistan and Nepal - Badly under utilized hydropower (major indigenous resource);

Sri Lanka - Limited hydropower potential and economic potential almost tapped (no export possibility);

India and Pakistan - Huge hydropower potential (but there would not be surplus for export);

Bangladesh - Limited hydropower potential and economic potential almost tapped (no export prospect)

Power Generation in Bhutan



Hydropower Plant Generation Capacity (MW)

Tala (2006-2007) 1,020 MW

Basochhu 64 MW

Kurichhu 60 MW

Chhukha 336 MW

Micro/Mini 8 MW

Total 1,488 MW

Present Hydropower Generation:

Low generation capacity - 5% of potential.

Bhutan plans to develop 13 hydropower projects to generate additional 10,334 MW power by 2020.

Further planning is being done to develop 14,270 MW beyond 2020.

http://www.bea.gov.bt/dgpc/

Bhutan is rich in water resources, but has no coal, gas or oil deposits.

In 2013, Bhutan generated 7,531 GWh and exported to India 5,557 GWh which is 74% of the generation.

Hydropower Potential of Bhutan



Bhutan has a hydropower potential of 30,000 MW. Of which 23,760 MW is techno-economically feasible.

ris.org.in/images/RIS_images/ppt/R-DORJI.ppt

River Basin-wise Hydropower Potential

Rivers in Bhutan originate from mountains in the north and flow through deep valleys down to the south;

Bhutan, only South Asian country, that exports surplus electricity to India

River Basin Catchment Schemes Potential Energy

Amochhu (Basin I) 2,400 km2 6 2,060 MW 9,656 GWh

Wangchhu (Basin I) 4,689 km2 10 2,740 MW 11,139GWh

Punatsangchhu (Basin II) 10,355 km2 19 8,099 MW 25,495 GWh

Mangdechhu/Manas West (Basin III) 7,392 km2 17 3,889 MW 18,322 GWh

Drangmechhu Manas-East (Basin III) 9,207 km2 20 6,692 MW 33,422 GWh

Jaldhaka, Mau, Nyeraamari, Dhansiri 2,750 km2 4 280 MW 1,213 GWh

Total 36,793 km2 76 23,760 MW 99,247 GWh

Hydropower Projects in Bhutan by 2020



National Transmission Grid Master Plan (NTGMP) for Bhutan, Central Electricity Authority, India,

Revised and Updated List of Projects by 2020: Bhutan and India Under “10,000 MW by 2020” Bilateral Cooperation have agreed to phase wise develop projects (Druk Green Annual Report 2013):

180 MW Bunakha Reservoir Scheme with THDC;

770 MW Chamkharchhu I with NTPC;

600 MW Kholongchhu HEP with SJVN; and

570 MW Wangchhu HEP with SJVN.

Hydropower Project Construction beyond 2020 and up to 2030




Bhutan’s Load Demand and Surplus Electricity for Export




Existing Installed Capacity

Capacity Addition by 2020

Installed Capacity at the end of 2020

Capacity Addition during 2020-2030

Installed Capacity at the end of 2030

1,480 MW 10,334 MW (14 HEPs)

11,814 MW 14,720 MW (61 HEPs)

26,534 MW

Bhutan’s Generation Capacity Addition by 2020:

Year Installed Capacity Load Export Potential

2020 11,814 MW 1,500 MW 10,314 MW

2030 26,435 MW 2,500 MW 23,935 MW

Transmission System Planning in Bhutan




A National Transmission Grid Master Plan (NTGMP) was prepared by Central Electricity Authority of India;

Grid scenarios for 2020 and 2030 time frames were prepared considering twin moose conductor in 400 kV transmission system.

Power Generation in Nepal



Hydropower Plant Type and Owner Capacity (MW)

NEA’s Major Hydropower (11 Nos.) 459.15

NEA’s Small Hydropower (28 Nos.) 14.24

NEA’s Plants (Isolated) 4.54

NEA’s Hydropower (Total) 477.93

IPPs Hydropower (39 Nos.) 255.64

Total Hydropower in Nepal 733.57

NEA’s Thermal 53.41

NEA’s Solar 0.10

Total Installed Capacity 787.08

Present Generation Capacity

Source: A Year in Review 2013-14, Nepal Electricity Authority (NEA)

Year 2009 2010 2011 2012 2013 2014

Peak Power Demand of the Integrated Nepal Power System (INPS) in 2014-15 stood at 1,291.8 MW, with 585 MW load-shedding (Kathmandu Post, August 19, 2015).

Peak Power Demand

Peak Demand 812.50 MW 885.28 MW 946.10 MW 1,026.65 MW 1,01.65 MW 1,291.8 MW

https://sambu.co.kr/wwwroot2008/sub02/sub02_01_d04.asp

60 MW Kulehani is the only storage scheme in Nepal

Hydropower Potential of Nepal



https://en.wikipedia.org/wiki/List_of_rivers_of_India#Maharashtra_Coastal_Rivers

Nepal has a hydropower potential of 83,000 MW. Of which 42,130 MW is techno-economically feasible.

River Basin Major Rivers (MW)

(Theoretical) Small Rivers (MW)

(Theoretical) Total (GW)

(Theoretical) Economic

Potential (MW)

Koshi 19,000 4,000 23,000 11,000

Gandaki 18,000 3,000 21,000 5,000

Karnali and Mahakali *

32,000 3,000 35,000 25,000

Others 3,000 1,000 4,000 1,130

Total 72,000 11,000 83,000 42,130

River Basin-wise Hydropower Potential in Nepal

http://www.energyhimalaya.com/information-center/facts-and-figures.html * The Capacity is Estimated Half for Border River

All four major river basin has part of catchment in the Himalaya. Snowmelt rivers are reliable and perennial sources.

Hydropower Potential of Nepal



Source: Nationwide Master Plan Study on Storage-type Hydroelectric Power Development in Nepal, JICA, Electric Power Development Company

Project Selection Procedure and Identified Projects



Project Selection Procedure for the Study:

Bhutan and Nepal have hydropower potential excess of their demand;

Hydrological data of rivers and topographical maps of hydropower projects in Bhutan were not available;

As a result projects in Nepal were chosen for the study;

Further, list of potential projects were evaluated based on technical (for example dam height and geology) and economic aspects;

Finally, Sunkoshi 2 Storage Project, Sunkoshi 3 Storage Project and Budhi Gandaki Storage projects were identified for the pre-feasibility study.

Exclusion of projects for which Department of Electricity Development (DoED) has issued survey/generation license to companies.

Projects were excluded when graphical coordinates of promising projects overlapped with projects holding DoED survey/generation license;

Transmission System Planning of Nepal




NEA is preparing a river basin wise Nepal Transmission System Master Plan for 2015 to 2035.

Existing Nepal - India Cross Border Links

New and Planned Nepal – India Cross Border Links

Load Forecast and Power Development Plan of Nepal



Power Development Plan:

Nepal’s Electricity Act of 1992 is a milestone in hydropower development in the country. Private developers were allowed to participate in hydropower development.

NEA prepares load forecast plan for Nepal;

Department of Electricity Development (DoED) issues survey and generation license to energy project developers;

In Nepal, hydropower project construction much relies on progress made by developers (project related studies and investigation carried out by them besides project equity arrangement and loan financing );

Nepal Investment Board (NIB) has the mandate to mobilize, manage and approve Public Private Partnerships (PPPs) and foreign private investment for large projects including hydropower.

NIB provides one window service for international investors to facilitate investment in Nepal;

NIB has signed project development agreement (PDA) for 900 MW Upper Karnali Project (GMR Group India) and 900 MW Arun III Hydropower Project with SJVNL of India. Other projects under processing are 650 MW Tamakoshi III, 750 MW West Seti HEP.

An integrated energy development plan focusing on hydropower is required for the country as the hydropower resource is huge and important.

Licenses have been issued to individuals, companies and agencies;

Financial and Economic Feasibility



Socio-economic and Environmental Issues

Conclusion and Recommendations

Projects Identified



Budhi Gandaki

Sunkoshi 3

Sunkoshi 2

Sunkoshi 2 Storage Project (East of Kathmandu 86 km by road; Dam site near Sindhuli Bardibas road;

Budhi Gandaki Storage Project (West of Kathmandu 86 km by road); Dam site about 2 km from Prithvi

Highway;

Sunkoshi 3 Storage Project (East of Kathmandu and 25 km upstream of Sunkoshi 2 Storage Project.

Salient Features of Sunkoshi 2 Storage Project



Reservoir

Full Supply Level (FSL) El. 560 masl

Min. Operation Water Level El. 505 masl

Drawn Down 45 m

Gross Capacity (at FSL) 3,511 Mil. m3

Effective Storage Capacity 2,596.1 M m3

Surface Area 63.02 km2

Hydrology

Catchment Area 10,222 km2

Long Term Average Flow 504.73 m3/s

Dam

Type Rock Fill

Maximum Height 166 m

Crest Length/Width 523 m / 10 m

Upstream Slope 1 V:2.2 H

Downstream Slope 1 V: 1.9 H

Total Dam Volume 20.15 M m3

Waterway and Powerhouse

Intake Structures Bell mouth

Total Rated Discharge 3 x 331.45 m3/s

Headrace Tunnel (HRT) 1

HRT Diameter 15 m

HRT Length 1,066 m

Penstock (Circular) Steel Lined

Penstock Diameter 10.4 m

Powerhouse Underground

Transformer Cavern Underground

Generating Equipment

Francis Turbine Vertical

3 Units

Net Head at Rated Water Level

127.93 m

Installed Capacity 1,100 MW

Diversion Tunnel (Circular)

Concrete Tunnel Diameter 18.1 m

Number 2

Salient Features of Sunkoshi 3 Storage Project



Reservoir


Minimum Operation Water Level El. 630 masl

Drawn Down 45 m

Gross Capacity (at FSL) 1,262 Mil. M3

Effective Storage Capacity 658 Mil. m3


Hydrology


Long Term Average Flow 281 m3/s

Dam

Type Rock Fill








Total Rated Discharge 197.38 x 3 m3/s


HRT Diameter 12 m

HRT Length 1,092 m






Vertical Francis Turbine

3 Units


116.85 m

Installed Capacity 3 x 200 MW = 600 MW


Concrete Tunnel Diameter 13.9 m

Number 2

Salient Features of Budhi Gandaki Storage Project



Reservoir


Minimum Operation Water Level El. 543 masl

Drawn Down 50 m

Gross Capacity (at FSL) 4,432 Mil. m3

Effective Storage Capacity 2,596 Mil. m3


Hydrology


Long Term Average Flow 235.48 m3/s

Dam

Type Rock Fill








Total Rated Discharge 130.55 x 3 m3/s


HRT Diameter 9.5 m

HRT Length 8,000 m






Vertical Francis Turbine

3 Units


220.88 m

Installed Capacity 3 x 333.33 MW = 1,000 MW


Concrete Tunnel Diameter 12 m

Number 2

Energy Generation and Tariff Determination



Energy Generation:

Tariff Determination: Electricity tariff was determined

by using fixed cost components and standard assumptions;

Assumptions: Debt: Equity Ratio: 70:30; Return on Equity: 20%; Prevailing interest rate: 11%.

Peaking energy 4 hours Sunkoshi 2 Storage Project; 4 hours Sunkoshi 3 Storage Project; 6 hours Budhi Gandaki Storage

Project.

Minimum Tariff:

USc 8.58/kWh;

Financial Feasibility



Objectives of Financial Analysis:

Verification of project’s profitability and sustainability, both of which are evaluated from a strictly financial perspective;

Analysis is based on discounted cash flow (DCF) model; Expected return on equity 15% after tax; Calculation of Project IRR, NPV, B/C Ratio;

Inflation of foreign currency 3%; Inflation of foreign currency 4.8%. (published by IMF for Nepal between 2013 and 2017); Project license issued for 30 years.

Civil cost; Electromechanical Equipment; Access and infrastructure; Engineering and management; Resettlement and environment; Contingencies.

Approach:

Assumptions:

Project Costs:

Financial Feasibility Continued …



Project Cost Estimate:

Financial Feasibility Continued …



Results of Financial Analysis:

Highest FIIR of 13.76%; NPV at 10% Discount US$ 112.283 million; Benefit Cost Ratio 1.38

Economic Feasibility



Objective of Economic Analysis:

Demonstrate that project implementation justifies efficient use of scarce economic resources;

Approach:

Project financial income and costs are compared to situation without the project; Analysis is based on discounted cash flow (DCF) modeling; Calculation of Project Economic IRR, NPV, B/C Ratio;

Key Assumptions:

Emission benefit US$ 23.24/tCO2/year (Synapse Energy Economics Inc. USA);

Results of Economic Analysis:

Highest EIIR of 30%; NPV at 10% Discount US$

1,419.83 million; Benefit Cost Ratio 1.58

Electricity Tariff and Transmission Line Cost



Transmission Line:

Proposed transmission line is +/- 500 kV HVDC as these lines costs significantly less over long distances compared to conventional AC or low voltage DC;

Tracks are narrower and right of way is 50 m;

Afghanistan - Price of electricity supply from neighboring Tajikistan and Kyrgyg Republic is less than USc 5.0/kWh, and the generation cost in the country itself is estimated to be USc 6.0/kWh (CASA 1000 Study);

Bangladesh, India, and Pakistan - Generation cost of the proposed project is comparable to the prevailing generation cost;

Electricity Tariff with Transmission Line Cost:

Riskiness in Hydropower Project



Technical Risk Design and Engineering

Implementation Method Selection

Construction Risk

Geotechnical Risk

Equipment Risk

Organizational Risk Competence of Developer

Competence of Consultant

Competence of Contractor

Competence of Vendors

Financial and Economic Risk Fund Risk

Inflation Risk

Improper Estimation

Foreign Exchange Risk

Other Risks Changes in Government Policies

Law and order situation

Social risks

Transmission line construction risk

Natural Risk Natural Calamity (Landslide, flood

etc.)

Hydrological Risk

Clearance Risk Environmental Clearance

Forest Clearance

Others

Socio-economic and Environmental Issues



Project Benefits:

Generation of both direct and induced employment;

Increased economic activities and its trickledown effect in the project area;

Tourism and fishery potential in the reservoir after project construction.

A total of 7,065 ha of cultivated land, forest, grassland, barren land, flood plains directly affected;

Likewise 1,221 ha of cultivated land, forest, grassland, barren land, and flood plains will be indirectly affected;

13,356 number of population living in 10 VDCs of Sindhuli, 9 VDCs in Kavrepalanchowk, and 1 VDC in Dolakha.

Important Adverse Impacts:

Environmental Impact Assessment (EIA):

Objectives: Ensuring environmental factors considered in the decision-making process;

Ensuring that possible adverse environmental impacts are identified and avoided or minimized;

Informing the pubic about the project.

Financing Sunkoshi 2 Storage Project and Transmission Line



Financing: Huge infrastructure and huge investment;

Given the level of investment required, a strong backing is essential to reduce off-takers and financing risk;

Rajansthan Sun Technique Concentrated Solar Project model could be useful for replication. Combined debt is from:

Foreign public institution

Local private investment

Range of key stakeholders are:

Policy framework set by government;

Debt from foreign development bank and an export credit agency;

A power company (Reliance Power) developed project and provided equity;

Areva Solar provided the technology.

Conclusion, Recommendations and Way Forward



A wide gap exists between supply of electricity generated and demand in South Asia. Cumulative power supply-demand gap in India, Pakistan and Bangladesh is 18, 707 MW.

This creates huge market for potential power producers Nepal and Bhutan to export power to India, Pakistan and Bangladesh;

Limited cross-border transmission interconnection exists between SAARC member countries;

India is the only country having cross-border transmission interconnections with Bangladesh, Bhutan and Nepal. Under sea transmission line is proposed between India and Sri Lanka;

Three projects identified are Sunkoshi 2 Storage Project, Budhi Gandaki Storage Project and Sunkoshi 3 Storage Project;

Out of the three projects, the Sunkoshi 2 Storage project with FIRR 13.67% was found to be feasible (equals WACC of 13.7%). B/C ratio is 1.38.

The financial analysis was done for an electricity tariff USc 8.85/kWh with 3% annual escalation for 5 years making USc 9.9 from 6th year onward.

Sunkoshi 2 project has the highest EIRR of 30%.

The project pre-construction work is envisaged to complete in 2 years, followed by 6 years for construction (1,000 MW Karcham Wantoo in Kinnaur completed in 5 years);

Conclusion, Recommendations and Way Forward



Prevailing electricity laws and regulations of Bhutan and Nepal has provision for cross-border electricity trade;

The SAARC Framework Agreement for Energy Cooperation (Electricity) singed by foreign minster during the 18th SAARC Summit held in Kathmandu in 2014 will give impetus to promote cross-border trade in electricity and help the development of a common regulatory mechanism;

Once the regional regulator is established, SAARC member countries can work towards the development of projects such as Sunkoshi 2 Storage project and its transmission lines;

If debts are available at terms and interest rates similar to those found in developed countries, cost of renewable energy in developing economies would be 30% lower;

Rajasthan Sun Technique Solar Project financing model could be useful for replication for Sunkoshi Storage Project;

The power market model of the existing cross-border trade between India and Bangladesh, Bhutan, and Nepal is a bilateral trade model where a PPA is done for contract duration;

A regional pool model such as SARPP will improve efficiency in the participating countries’ generation, transmission, and distribution system as a result of demand and supply management by integration of power assets.

Nepal Investment Board can play a key role in financing Sunkoshi 2 Storage Project.



http://indiaenergy.gov.in/docs/ISGF_CBT%20Documentation.pdf

Way Forward:

Track I Diplomacy strengthened vis-à-vis Track II Diplomacy

Initiative by SEC etc.



Thank You Shyam S. Shrestha

Documents

Export Oriented Hydropower Projects in South Asiasaarcenergy.org/wp-content/uploads/2016/06/Study-Report2_Shyam.pdfExport Oriented Hydropower Projects in South Asia ... 235,110 3km